I’m a bit pressed for time this morning due to social commitments, so let’s get right to it. Equities produced a pretty flat session yesterday with barely any signal on the Zero’s market participation signal. Now this is not unusual and we’ve seen days like this on a regular basis especially after snap backs to the upside. Early institutional dip buyers have done their part at this point and are now fishing for hobby bears they can rip to pieces in the following sessions.
Watching price action like this it is often tempting to assume that there’s no more mojo in the advance but for the past few years that’s not how it usually has played out. Now if we ever transition into a bear market again then sessions like these may be seen before further legs to the downside. But until we officially get there the bulls still run the show.
My debit spread is sitting pretty at this point but now has to get a move on. If you’re not in the market yet then this may be a spot for a small exploratory futures positions. A reader asked me yesterday why I wouldn’t go long the ES futures yesterday or on Monday and my answer was that I could not justify the possible overnight downside risk. I first wanted to see positive price action and the snowball’s chance of some type of support should things start sliding again.
The trailing stop on my DX campaign has been stopped out, not surprisingly. At least I was able to squeeze 1.5R out of it. But this may just be the overture to yet another leg lower on the USD.
Crude isn’t looking stellar either and I expect it to drop to my ISL. We shall try again near the 100-day SMA sometime in the future.
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